Marriage of Irwin, In re
| Decision Date | 27 January 1992 |
| Docket Number | 26274-2-I and 28689-7-I,Nos. 24829-4-,s. 24829-4- |
| Citation | 64 Wn.App. 38,822 P.2d 797 |
| Court | Washington Court of Appeals |
| Parties | In re the MARRIAGE OF Diane IRWIN, Appellant, and Gerald Irwin, Respondent. |
Walter G. Meyer, Mark David Watson, Yakima, for respondent.
Diane Irwin appeals the trial court's decree of dissolution of her marriage to Gerald ("Jere") Irwin. Jere cross-appeals. We affirm in part and reverse in part.
The Irwins were married in 1958. The couple has five children, only one of whom was a minor (b.d. 9/27/72) at the time of trial. The couple separated in January 1985. A petition for dissolution was filed on July 15, 1987. Trial took place in May 1989.
The trial court divided the couple's property, both separate and community. The court stated that it was attempting to approximate a 50-50 division, based on the lengthy duration of the marriage. To Diane, the trial court awarded the following:
Asset Value
a. 2300 River Road condo, subj. to mortgages $ 0
b. 24th Ave. main plant 562,000
c. Silver bars 1/2
d. 1987 Subaru 7,000
e. Seattle houseboat, subj. to indebtedness 27,000
f. Retirement 5,000
g. Seattle house, subj. to loans 77,500
h. Paxton Family Trust 250,000
i. 16th Ave.--Aikens purchase option 795,075
j. 16th Ave.--23 acres 900,000
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TOTAL ASSETS AWARDED TO DIANE $2,623,575
The trial court awarded the following assets to Jere:
Asset Value
a. Yakima house, subj. to indebtedness $ 18,000
b. Front Street bldg. 150,000
c. 24th Ave. (2 acres), subj. to indebtedness 68,500
d. Farm equip. & supplies, subj. to indebtedness 0
e. Silver bars 1/2
f. Jeep 5,000
g. Corvette 20,000
h. Ranchero 7,500
i. Retirement 226,000
j. Fechter Rd. house 48,000
k. 16th Ave.--Aikens purchase option 795,075
l. Guns 3,000
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TOTAL ASSETS AWARDED TO JERE
EXCLUSIVE OF BUSINESSES $1,341,075
The trial court determined that the couple's $70,000 IRS tax liability should be paid by Jere. Subtracting that liability from his award leaves an award of $1,271,075. At this point in the distribution, Diane had received $1,352,500 The trial court utilized the expert's formulas in coming up with a figure for valuing the companies. 1 The trial court took the figure $7,590,000 and reduced it by 10 percent because of the cyclical nature of businesses and because a large part of the value of the businesses was Jere himself, and arrived at a valuation figure of $6,731,000. 2
more than Jere. The trial court valued the three familybusinesses, IRAD (Irwin Research & Development Co.), a company that manufactures thermoforming machines that make styrofoam and hard plastic products, ITC (Irwin Technical College), a research and development company associated with IRAD, and Magic Metals, a sheet metal fabricating company that manufactures parts mainly for IRAD. Diane's expert, Arthur Brueggeman, testified that his estimate of the value of the Irwins' interest in the three companies was $7,952,000
The trial court then awarded all three businesses to Jere. To keep the property division at approximately 50-50, the trial court determined that Jere would owe Diane $3,360,000 for her share of the businesses. 3 However, since she had already received a larger share of the property exclusive of the businesses, the trial court subtracted the excess from the amount due to Diane. In other words, the trial court subtracted $1,352,500 (the value of the excess assets received by Diane) from $3,360,000. The oral decision stated that the amount was approximately $2 million. 4
The decree ordered Jere to make cash payments to Diane of $500,000 on December 31, 1989; three payments of $250,000 each on December 31, 1990, December 31, 1991, and December 31, 1992, and a final payment of $795,000 on The trial court determined that a ground lease on the 16th Avenue property between the Irwins and IRAD was not valid. The decree states as follows:
December 31, 1993. In addition, four quarterly interest payments were required each year, these being $38,637.50 each in 1990; $32,387.50 each in 1991; $26,138.50 each in 1992, and $19,887.50 each in 1993. These payments are referred to by the parties as equalization payments, the purpose of the payments being to equalize the property distributions
9.3 There has also been testimony introduced concerning the existence of a lease of certain of the property to Irwin Research and Development Company and of lease payments to Gerald Irwin from Irwin Research totalling $240,000 that were made for such property prior to trial. The court finds that there is no such lease in existence that was signed or if it is in existence that it is invalid, of no effect, and should be cancelled and held for naught. As a result of said invalidity and cancellation, Irwin Research and Development Company is owed the amount of $240,000 as the result of lease payments made to Gerald Irwin under an unsigned lease through March 31, 1989. 5
The trial court also awarded Diane maintenance in the amount of $12,000 per month until the equalization payments were to begin on December 31, 1989. This resulted in her receiving $84,000 in maintenance payments. The decree also ordered that the parties share in the payment of Brueggeman's fee and that Jere should pay Diane $2,500 for costs.
In a subsequent proceeding, the trial court ordered Jere to pay Diane $75,000 toward her attorney's fees. The order indicated that the court had considered:
the efforts of attorneys for petitioner to settle the case, the fact that discovery by the petitioner was made more difficult because of the record keeping practices of the respondent and his unfamiliarity of the legal process and the respondent's ability to pay attorney fees and the fact that the respondent in all likelihood faces substantially lesser attorney fees than the petitioner ... Diane held an interest in a family trust known and referred to by the parties as the Paxton Family Trust. At the time of trial, she had received an offer of $250,000 for her interest in the trust. Jere offered evidence at the trial to show the value of her interest in the trust to be much greater than $250,000. The trial judge appears to have rejected this evidence on the theory it would be immaterial if he awarded one-half of any value in excess of $250,000 to each party. After the decree was entered, it was modified at Diane's request to the extent that her entire interest in the Paxton Family Trust was awarded to her, free and clear of any claim by Jere. However, the value of her interest in the trust was left at $250,000.
Diane timely filed an appeal in this court. She also brought a motion in this court to clarify her rights under RAP 2.5(b), regarding acceptance of benefits, since she had received the maintenance payments, the attorney's fees payments, and had placed the first $500,000 equalization payment in her attorney's trust account. The commissioner's order dated January 1990 indicated that her motion should be directed to the trial court, and a 3-judge panel affirmed the commissioner's order. On May 11, 1990 the trial court ordered a $500,000 lien against her interest in the 16th Avenue property in favor of Jere as security while she pursued her appeal. Jere appealed that trial court order, and his appeal was consolidated with Diane's appeal.
Jere failed to make the $250,000 principal payment due on December 31, 1990. Instead, on January 11, 1991, he filed a Motion for Relief from Judgment. The motion requested relief as follows:
COMES NOW the respondent herein and hereby moves this court for an order for relief from that certain judgment and decree dated August 21, 1989, and as modified by that certain Order Modifying Findings of Fact and Conclusion[s] of Law and Decree of Dissolution dated November 7, 1989.
Specifically, respondent seeks the following relief:
1. For a six-month extension of time on all principal and interest payments due on and from December 31, 1990 as provided in paragraph 7 of the Decree of Dissolution.
This motion is based upon CR 60(b)(11), the files and records herein and the sworn statements of Jere Irwin, Steven Alegria, Dave Irwin and Brett Friestadt.
The parties submitted sworn statements, affidavits, memorandums and depositions. At the hearing on the motion, Diane's counsel argued that the purpose of a CR 60 show cause hearing is only to determine whether to go forward with a full fact-finding hearing. The trial court disagreed, and declined to take any live testimony.
The trial court granted Jere's motion for relief. The order contained the following language:
FINDINGS
1. That this court has jurisdiction to consider respondent's Motion For Relief From Judgment;
2. That Mr. Irwin's ability to make the principal payments previously ordered by this court comes through and is related to the financial condition of respondent's companies;
3. That due to emergency financial circumstances developing since the time of trial, the financial condition of the Irwin companies was such that respondent did not...
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